Arman Financial Services Limited · NSE:ARMANFIN
Arman Financial Services — H1 FY25 Earnings Presentation
41 slides from Arman Financial Services's earnings presentation, Nov 14, 2024
Slide 1: Exchange covering letter: presentation on financial performance
________________________________________________________________________________________________________________________________________________________________________________________________ _Registered Office: 502-503, SAKAR III, OPP. OLD HIGH COURT, OFF ASHRAM ROAD, AHMEDABAD-380014, GUJARAT, IN
Slide 2: Arman Financial Services Limited Investor Presentation – November 2024
Arman Financial Services Limited Investor Presentation – November 2024
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Arman Financial Services Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for an
Slide 4: Contents
Contents Business Update Page 4 - Page 7 About the Company Page 8 - Page 14 Presence in Attractive Retail Page 15 - Page 21 Lending Segments Efficient Liability Management Page 22 - Page 25 Strong Financial Performance Page 26 - Page 39 3
Slide 5: Business Update
Business Update Business Update
Slide 6: H1FY25 Performance Highlights
H1FY25 Performance Highlights Rating Upgraded to A | stable outlook by Acuite Ratings in August 2024 INR 2,465 Crore INR 99 Crore Assets Under Provisions Cumulative Provisions stood at INR 114.32 Crore as on 30th Management (7.0% Y-o-Y) and Write offs September 2024 (covering 4.64% of the consolidat
Slide 7: Recent Fund Raises (1/2)
Recent Fund Raises (1/2) December – 2023 September - 2022 Company raised INR 230 crore via Shareholding Pattern as on 30 th Company raised INR 115 crore via allotment of CCDs September, on Fully diluted Qualified Institutional Placements of and OCRPS on a preferential basis Business Performance basi
Slide 8: Recent Fund Raises (2/2)
Recent Fund Raises (2/2) Calculated as per IND-AS Net worth (INR Crore) Debt/Equity (x) # CRAR (%) 847 865 2.1 770 813 65.8% 62.7% 1.8 1.8 1.5 48.2% 39.2% 43.8% 37.9% 32.8% 26.4% Dec-23 Mar-24 Jun-24 Sep-24 Dec-23 Mar-24 Jun-24 Sep-24 Dec-23 Mar-24 Jun-24 Sep-24 Arman (Standalone) Namra #After adjus
Slide 9: About the Company
About the Company About the Company
Slide 10: About Arman Financial Services
About Arman Financial Services About the Company Business Performance Efficient Liability Management • A diversified NBFC focusing on large under-served rural & semi-urban • Consistent rating upgrades backed by strong financial & operating retail markets performance • Namra & Arman credit rating upg
Slide 11: Journey so Far
Journey so Far 1992 1995 1998 2010 2011 • Company Incorporated • Listing on BSE – • Launched 2W Loans • Launched Microfinance • Raised PE funding • Started bill discounting Issue subscribed business from Incofin & Machine leasing 22x • Disbursement crosses INR 50 Crore 2019 2018 2017 2014-16 2013 •
Slide 12: Geographical Footprint
Geographical Footprint Geographical AUM Mix Number of (Consolidated) H1 FY25 H1 FY24 Branches 6% Microfinance 381 309 6% 3 28% 13 9% MSME 89 71 92 57 12% 2W & Rural 2W 4 5 60 18 23% 89 76 15% Total 474 385 45 Gujarat Rajasthan Others 17 Uttar Pradesh Bihar Madhya Pradesh Maharashtra 4 Number of Bran
Slide 13: Strong Underwriting Measures by Leveraging Digital Transformation
Strong Underwriting Measures by Leveraging Digital Transformation Loan Management Instant Verification Of Key Details • Loan Utilization check • The LOS* & LMS* System facilitates instant • Instant pre-closure and pre-settlement and its verification simulation for the customer to understand • KYC Va
Slide 14: Eminent Board of Directors
Eminent Board of Directors Alok N. Prasad Jayendrabhai B. Patel Aalok J. Patel Chairman Vice Chairman & Managing Director Joint Managing Director • A veteran banker with over 35 years of regulatory, banking and • He has been an entrepreneur for 45 years. He was involved in a • He has 16 years of ban
Slide 15: Competitive Moat
Competitive Moat Focus on small ticket retail loans to the large under served informal segment customer in rural & semi urban geographies Diversifying products, geographies, sources of funds and delivering growth by increasing volumes rather than ticket sizes Competitive Conservative operations fram
Slide 16: Presence in Attractive Retail Lending Segments
Presence in Attractive Retail Lending Segments
Slide 17: Product Offerings across Verticals
Product Offerings across Verticals 80%* 16%* 3%* 1%* Microfinance - JLG MSME Loans Two-Wheeler Loans Individual Business Loans Average Ticket Size : INR 46,000 Average Ticket Size: Average Ticket Size: Average Ticket Size: (Cycle 1 & 2 -INR 25k - 60k INR 77,000 INR 72,500 INR 82,500 Cycle 3+ -INR 25
Slide 18: Microfinance Loans
Microfinance Loans (INR Crore) AUM* Disbursement Total Income Profit After Tax Avg. Ticket Size (INR) 1,945 1,981 902 281 66 45,000 46,000 247 625 25 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 *Includes Individual Business Loans • Disbursement: 100% Cashless • JLG model wi
Slide 19: MSME Loans
MSME Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 398 175 72 80,000 77,000 291 134 49 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 • Individual enterprise /working capital loans for small rural businesses in low competition • Disbursement: 100% Cashless areas • C
Slide 20: 2W and Rural 2W Loans
2W and Rural 2W Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 69 74 31 10 71,000 72,500 26 8 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 • Hypothecation (secured) loans given to self-employed /cash-salaried customer in the • Disbursement: 100% Cashless informal s
Slide 21: MSME Process Overview
MSME Process Overview MSME Process Overview Sourcing Underwriting Collections • In-house sourcing team (No DSAs) • Credit bureau check (CRIF & CIBIL) • Team member that does sales also • handles collections • Feet-on-Street sales team model Physical FI & PD by in house credit manager at residence &
Slide 22: Collection Efficiency
Collection Efficiency Microfinance MSME Two-Wheeler Total 95.3% 94.3% 94.6% 96.8% 96.0% 96.2% 95.5% 96.2% 95.8% 95.6% 94.6% 94.9% Jul-24 Aug-24 Sep-24 Jul-24 Aug-24 Sep-24 Jul-24 Aug-24 Sep-24 Jul-24 Aug-24 Sep-24 Two- Update on Collections Particulars (INR Crore) Microfinance MSME Wheeler Total • T
Slide 23: Efficient Liability Management
Efficient Liability Management
Slide 24: Strong Capitalization with Sufficient Liquidity
Strong Capitalization with Sufficient Liquidity Capital Adequacy Ratio ALM Position (in Months) 62.7% 19 19 19 19 19 17 17 17 16 16 43.8% 39.2% 32.6% 32.8% 29.0% 25.6% 18.7% 31-Mar-22 31-Mar-23 31-Mar-24 30-Sep-24 Q2 FY 2 4 Q3 FY 2 4 Q4 FY 2 4 Q1 FY 2 5 Q 2 FY 2 5 Arman (Standalone) Namra Av g T enu
Slide 25: Borrowing Profile
Borrowing Profile Borrowing Mix (%) Top 5 Lending Partners (INR Crore) 2,245 2,240 2,261 2,217 2,019 Top 5 Lenders % of Borrowings Lender 1 - TL & DA 15.69% 32.5% 35.7% 35.9% Lender 2 - DA 8.07% 41.1% 40.2% Lender 3 - TL & PTC 5.45% 1.3% 3.2% 4.4% Lender 4 - TL 4.66% 23.0% 5.1% 4.6% 12.3% 19.7% Lend
Slide 26: Securitization and Lending Partnerships
Securitization Non-Bank Bank Partners Borrowings Borrowings Lending Partnerships NCDs & ECB 25
Slide 27: Financial Performance
Financial Performance
Slide 28: H1 FY25 Consolidated Profit & Loss Statement
H1 FY25 Consolidated Profit & Loss Statement Particulars (INR Crore) Q2 FY25 Q2 FY24 YoY % Q1 FY25 QoQ% H1 FY25 H1 FY24 YoY % Income from Operations 181.5 160.3 184.4 365.9 309.8 Other Income 0.0 0.0 0.0 0.0 0.0 Gross Total Income 181.5 160.3 13% 184.4 -2% 365.9 309.8 18% Finance Costs 65.3 67.4 65.
Slide 29: Balance Sheet – 30th September 2024
Balance Sheet – 30th September 2024 Particulars (INR Crore) Consolidated Standalone Particulars (INR Crore) Consolidated Standalone ASSETS Sept-24 Mar-24 Sept-24 Mar-24 LIABILITIES & EQUITY Sept-24 Mar-24 Sept-24 Mar-24 Financial Assets Equity Share capital 10.5 10.5 10.5 10.5 Cash and cash equivale
Slide 30: Consolidated Business Performance
Consolidated Business Performance (INR Crore) AUM Disbursement Gross Total Income 2,639 2,594 669 183 184 181 2,437 2,465 169 2,304 561 160 537 459 373 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Net Total Income Pre-provision Operating Pr
Slide 31: Consolidated Business Performance
Consolidated Business Performance Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 15.5% 33.3% 26.2% 25.1% 25.1% 25.4% 25.4% 15.2% 15.1% 14.1% 13.1% 28.7% 25.4% 25.7% 26.6% Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Asset Qualit
Slide 32: PAR Movement
PAR Movement PAR 31-90 (%) Movement GNPA (%) 8.3% 7.9% 6.9% 10.7% 6.0% 3.7% 4.4% 4.8% 4.1% 4.0% 7.8% 3.7% 2.4% 8.6% 2.8% 2.9% 2.2% 2.5% Mar-21 Mar-22 Mar-23 Mar-24 Sep-24 4.6% 4.8% 3.9% NNPA (%) 4.3% 4.5% 2.3% 2.1% 4.7% 1.9% 2.1% 1.4% 1.1% 1.6% 0.3% 2.9% 1.1% 0.5% 0.7% 0.9% Mar-21 Mar-22 Mar-23 Mar-
Slide 33: H1 FY25 – Standalone P&L Statement (2W, MSME & LAP)
H1 FY25 – Standalone P&L Statement (2W, MSME & LAP ) Particulars (INR Crore) Q2 FY25 Q2 FY24 YoY % Q1 FY25 QoQ% H1 FY25 H1 FY24 YoY % • Standalone AUM grew by 35% Y-o-Y to ~INR 483 Crore as compared to ~INR 359 Crore Income from Operations 44.1 33.8 42.2 86.3 63.2 • Disbursement of ~INR 104 Crore in
Slide 34: Standalone Business Performance
Standalone Business Performance (INR Crore) AUM Disbursement Gross Total Income* 465 483 135 42 446 39 85 15 5 391 82 104 34 5 359 79 101 102 31 79 30 4 69 81 23 14 18 5 4 14 398 120 37 367 383 34 291 312 79 89 86 26 27 30 67 Q2FY24 Q3FY24 Q4FY24# Q1FY25# Q2FY25# Q2FY24 Q3FY24 Q4FY24# Q1FY25# Q2FY25
Slide 35: H1 FY25 - Namra Finance Profit & Loss Statement
H1 FY25 - Namra Finance Profit & Loss Statement Particulars (INR Crore) Q2 FY25 Q2 FY24 YoY % Q1 FY25 QoQ% H1 FY25 H1 FY24 YoY % • Over the years we have steadily expanded and Income from Operations 138.0 126.6 143.1 281.1 246.9 deepened our MFI presence through our wholly owned subsidiary, Namra Fi
Slide 36: Microfinance Business Performance – Namra Finance (1/2)
Microfinance Business Performance – Namra Finance (1/2) (INR Crore) AUM Disbursement Gross Total Income 2,193 2,129 534 147 143 2,046 1,981 136 138 1,945 456 459 127 356 269 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Net Total Income Pre-
Slide 37: Microfinance Business Performance – Namra Finance (2/2)
Microfinance Business Performance – Namra Finance (2/2) Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 13.3% 13.6% 13.0% 31.2% 24.9% 23.8% 23.8% 12.5% 23.6% 23.0% 12.0% 26.2% 21.5% 21.5% 23.0% Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY
Slide 38: AUM and Disbursements Trends
AUM and Disbursements Trends Total AUM (INR Crore) Total Disbursements (INR Crore) 2,639 2,297 14% 3% 14% 1,943 1,767 3% 13% 13% 3% 3% 1,233 1,024 13% 83% 880 860 4% 778 14% 82% 814 16% 4% 685 17% 84% 12% 84% 11% 15% 6% 547 12% 10% 509 453 14% 10% 15% 83% 17% 13% 5% 10% 248 0% 248 3% 82% 172 204 20%
Slide 39: Historical Metrics
Historical Metrics Gross and Net Total Income Yield & NIM (%) Asset Quality (INR Crore) Demonetization COVID-19 Demonetization COVID-19 Demonetization COVID-19 662 6.7% 28.7% 28.3% 27.4% 25.5% 26.7% 24.4% 25.2% 21.5% 22.9% 424 396 17.4% 16.5% 16.5% 15.9% 14.0% 14.3% 14.2% 13.8% 2.6% 2.6% 4.6% 3.3% 2
Slide 40: Annexure
Annexure • Gross Interest Income = Interest Income + processing fees / other charges • Net Interest Margins = Net Interest Income / Average AUM (On + Off -Book) • Yields = Gross Interest Income / Avg. AUM (On + Off Off -Book) • Cost-to -Income Ratio = Opex (excl. provisions) / Net Total Income • GNP
Slide 41: Thank You
Thank You Contact Information Company: Investor Relations Advisors: Strategic Growth Advisors Pvt. Ltd. Arman Financial Services Limited CIN: U74140MH2010PTC204285 CIN: L55910GJ1992PLC018623 Mr. Abhishek Shah Mr. Vivek Modi abhishek.shah@sgapl.net Chief Financial Officer (CFO) +91 9930651660 Email :
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